New directives for sale of refurbished hard disk drives

Delhi High Court has directed entities selling refurbished hard disk drives (HDDs) to comply with specific disclosure requirements on their promotional materials, including websites, e-commerce listings, brochures, and manuals. The High Court’s decision came in the wake of a series of lawsuits filed by Seagate Technology and Western Digital Technologies against several companies selling refurbished HDDs. 

They contended that selling these HDDs as refurbished products without their original branding amounted to impairment, which is not allowed under Sections 30(3) and 30(4) of the Trade Marks Act, 1999.

The defendants in the case included Daichi International, Consistent Infosystems Pvt Ltd, Geonix International Pvt Ltd, and Cubicor Information Systems Pvt Ltd.

Seagate and Western Digital argued that HDDs manufactured by them become unserviceable after a certain period but they still retain some functionality. These end-of-life HDDs are often refurbished and sold to consumers by various entities, particularly after they are imported into India.

According to the plaintiffs, these used HDDs are imported by various importers, refurbished by removing the original brand marks, repackaged under different brand names, and sold with an extended two-year warranty.

Seagate and Western Digital contended that selling these HDDs as refurbished products without their original branding amounted to impairment,

The High Court, in its ruling said that Seagate and Western Digital failed to demonstrate any rule, regulation, or policy that prohibits the import of discarded HDDs or equipment into India.

Presiding over the case, Justice Anish Dayal emphasised that if the traders who refurbish fully disclose any alterations or removal of original marks on HDDs and clarify that the product differs from the original, consumers are sufficiently informed about their purchase.